Cash & Capital

Deposit Policy Impact on Cash & Risk

Check your deposit policy against your real material lead cost, and see your dollar exposure if a customer walks away.

Job size$Material cost (base)$Material markup%Deposit percentage%

Walk-away exposure$710

Recommended minimum deposit37.1%

Deposit collected$3,000

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Next Decision

Based on your results, these related decisions are available.

Receivables & Payment Terms Cash ImpactA deposit collected upfront reduces the receivables gap this creates on the same job.

Want to Learn More?

ReferenceDeposits, Retainage, and Payment TermsThree separate contract terms, receivables timing, deposit size, and retainage, each tie up cash in a different, quantifiable way. Tightening payment terms alone from 45 to 15 days frees $49,315 in cash on $600,000 of annual revenue.

Methodology

Formula: Material lead cost = material cost base × (1 + markup). Deposit collected = job size × deposit %. Walk-away exposure = max(material lead cost - deposit collected, 0). Recommended minimum deposit % = material lead cost / job size.

Assumption: Models only the material-cost risk, not lost labor time or opportunity cost of the booked slot.

Limitation: A deposit above the recommended minimum fully covers material lead cost, leaving zero modeled exposure.